Tax time is the time to go back through receipts, seek advice

Tax time is the right time to comb through that wad of receipts collected through 2011, be they from medical expenses or energy-saving home improvements, in search of deductions.

“People tend not to keep good records about this stuff,” said Rodney D. McCorkill, tax manager for the Springfield accounting firm Moriarty & Primack. “But it all adds up.”

According to the Internal Revenue Service, taxpayers have until April 17 this year. April 15 falls on a Sunday and the Monday is a holiday in Washington.

Volunteer Income Tax Assistance, or VITA, sites where low- and moderate-income people can get their returns filled out for free have seen a rash of business already because people are hungry for their refunds, said Barbara A. Baran, the coordinator of Holyoke Credit Union’s VITA program, which is in its first year.

“We’ve been told to expect a run at the end as well,” Baran said.

McCorkill said people also have until April 17 to make contributions to retirement accounts, like IRAs, and have the tax benefit apply to 2011.

According to the IRS, legislation enacted in December 2010 extended several popular tax benefits, including the American Opportunity Credit for parents and students, the Enhanced Child Tax Credit and the expanded Earned Income Tax Credit.

McCorkill said that means the 2010 returns most people filled out last year at this time are virtually the same as the 2011 returns they face this year.

For businesses, the big thing that is going on is the Business Health-Care Tax Credit, part of the federal health care reforms. McCorkill said a business averaging fewer than 25 employees who earn an average wage of less than about $50,000 a year can claim a tax credit of up to 30 percent of the health-insurance premiums the company pays for employee health-care.

“For certain small businesses, if you meet the requirements, it can be a substantial credit,” he said. “And a lot of smaller companies that don’t have a professional doing their taxes might not know about it.”

For individual homeowners, the energy-savings credit is not quite as attractive as it once was, McCorkill said. But there is still a tax credit of up to $500, down from the $1,500 combined limit that applied for 2009 and 2010, available for people who put in efficient windows, or an energy-efficient furnace or water heater. “You might have bought it in a hurry because the old one conked out,” McCorkill said. “But you should always save the paperwork from that type of thing.”

According to the IRS, a lot of taxpayers are also asking questions about mileage. The standard mileage rate for business use of a car, van, pick-up or panel truck is 51 cents a mile for miles driven during the first six months of 2011 (January through June) and 55.5 cents a mile for the rest of the year, up from 50 cents for 2010.

Income tax time is also an opportunity for low-income citizens to take advantage of the federal Earned Income Tax Credit. But the problem is, too few do so.

According to a study released last year by the United Way of Pioneer Valley, 18,195 Hampden County residents failed to claim their federal income-tax refunds and Earned Income Tax Credit in 2010, a loss to the community of a collective $35 million.

Baran said that’s one reason the Holyoke Credit Union is a VITA site this year, with credit union employees trained as volunteers.

Tax help is available only at the Holyoke office, 490 Westfield Road, every Monday and Wednesday from 5 to 8 p.m. and on Saturdays, March 24 and 31 and April 14, from 10 a.m. to 3 p.m.

“We’d rather see the money go directly to these people instead of them paying to get their taxes done,” she said.

Holyoke Credit Union also wants people to avoid expense refund anticipation loans offered by some for-profit tax services. Those loans cost people a chunk of their refunds. Instead, Baran said Holyoke Credit Union will give folks a $100 bonus if they sign up for a checking account at the credit union and get their refund direct deposited. The funds show up in a few days.

“What we are hoping to do, especialy in this economy, is for people to put their money to good use,” she said.